Maitland/AMO Private Equity Monitor – 14 February 2020
Worth a read
What to do if you’re 6’4″, play for the National Basketball Association but have a ruptured tendon? Go into private equity. The Wall Street Journal reports on the curious story of Victor Oladipo whose injury led him to join Patricof Co, a private investment platform which specialises in helping athletes find potential private equity investments. The article notes that this is becoming increasingly common for athletes who are becoming flush with cash and are tickled by the opportunity to pop their money into private equity deals which they might not even know about.
An American Congressman has called upon the Governor of California to investigate CalPERS’ CIO. According to Institutional Investor, Congressman Jim Banks has also urged the Governor to “fire” Yu (Ben) Meng. However, CalPERS’ CEO lobbed a vociferous rebuttal against a “reprehensible attack on a US citizen”. The article notes that Rep. Banks finds himself in odd company – the Falun Gong religious group, who have published a “blistering critique” of Meng and claimed that CalPERS’ investments in Chinese companies along with Meng’s work abroad amounted to “deep ties” to the Chinese regime.
Bernie Sanders and Elizabeth Warren share a common loathing for private equity, so the Democratic Party might not seem the most obvious choice for private equity firms’ donations. “Au contraire”, trumpets Private Equity News: thus far in this mildly unedifying election cycle, private equity firms are coughing up a dollar or two for Democrats. One reason given is because Sanders and Warren are the exception – the rest of the Democrats are moderates who neither incur nor seek the ire of the industry. Interestingly the one candidate private equity seems to shun altogether is President Trump. The article posits that this is reflective of the industry’s ambivalence towards the former reality TV star.
So where are we? Private equity executives and their bankers have been debating whether or not the market has peaked. How long can the bull market scamper along for? Private Equity News reports that there are rivers of funds flowing into private equity and that they’re all under pressure to spend but that the cost of deals are on the up, in some cases, up to 15.2 x EBITDA. The debate – and the market it would seem – is far from over.
Wall of money
Technology group SoftBank has struggled to reach its $108bn fundraising goal and, according to sources, may not even make half of this total. Investors have refused to put up new cash and are rumoured to be disillusioned by high-profile failures like WeWork and the chaotic operational structure of the business. Most of the capital is said to be coming from SoftBank itself.
Brookfield Asset Management has raised $20bn for its latest infrastructure fund, the second largest of its kind after the $22bn raised by Global Infrastructure Partners in December. This latest fundraising shows that investors are very keen on real assets, particularly where it relates to renewable energy, data centres and railroads, due to the sector’s reputation for steady returns that are less risky than private equity.
KKR has raised $1.3bn to invest in companies to provide solutions to an environment or social challenge. It will invest in the lower mid-market across the Americas, Europe and Asia, with KKR itself putting $130m alongside investors.
Paris-based Montefiore Investments has closed two funds and raised €1bn, including €850m for a “heavily oversubscribed” fifth buyout fund. This makes it approximately twice as large as the predecessor, which closed in 2016. The other vehicle will focus on co-investments.
According to documents from a Louisiana pension fund, Bridgepoint is targeting £1bn for its fourth Development Capital fund, which would make it 65% larger than its predecessor. The strategy targets lower midmarket investments with enterprise values between £30m and £150m.
UK-based August Equity has closed its latest flagship fund on £300m and struck its first deal in Air IT. The fund was launched in September with a target of £275m and was significantly oversubscribed, according to Managing Partner Philip Rattle. 40% of the new capital came from North America, including pension funds and endowments.
|Acquisition Target||Buyer||Seller||Value||Date Announced||Region||Sector|
|ATG||TA Associates||ECI Partners||Undisclosed||14/02/2020||US||Auctioneers|
|Cadence Education||Apax Partners||Morgan Stanley Capital Partners||Undisclosed||13/02/2020||US||Education|
|Wealthtime||Anacap Financial Partners||-||Undisclosed||12/02/2020||UK||Fintech|
|Pageant Media||Intermediate Capital Group||-||£100m-£150m||12/02/2020||UK||TMT|
|Air IT||August Equity||-||Undisclosed||11/02/2020||UK||TMT|
|Deutsche Glasfaser,||EQT and Omers||KKR||€2.8bn||10/02/2020||Germany||TMT|
|Crealsa Investments||Iman Capital Partners||-||Undisclosed||10/02/2020||Spain||Financial Services|
Movers and Shakers
Pan-European firm Capital D has hired Daryl Cohen as a director from Inflexion Private Equity. The firm has also appointed Boniface Molnar and Yoan Pashov as an analyst and associate respectively.
Apiary Capital has promoted Jeniv Shah to partner and Thomas Alldred to investment director.
Daniel Berglund has been promoted to partner at Nordic Capital, focusing on technology, payments and healthcare IT. He joined the firm in 2010.
H.I.G Bayside Capital has promoted Andrew Scotland to co-head of special situations debt in Europe, He joined the firm in 2013 and was previously a managing director.
Aztec Group has made four senior promotions in Luxembourg, Guernsey and Jersey, with another 133 announced across the entire business.
The two heads of Goldman Sachs Group‘s private investing business have quit the firm just weeks before they were set to hit the fundraising trail. Sumit Rajpal and Andrew Wolff jointly ran Goldman’s $100bn-plus merchant bank.
EQT partner Matthew Levine is leaving the firm after more than five years, according to an automated response to an email.
From the horse’s mouth...
“If it sounds too good to be true, then it probably is.” – Todd Gurley, an American football professional, reflecting on the caution needed when investing
“Preserving and protecting PIR’s mission is our highest priority. Ethos will not raise prices beyond PIR’s historical constraints, or reduce services, or abuse the trust that comes with operating an exemplary registry” – Erik Brooks, founder and CEO of Ethos Capital which has agreed to buy the Public Interest Registry articulates his vision for it
“Taxes are not good things, but if you want services, somebody’s got to pay for them so they’re a necessary evil.” – Michael Bloomberg, presidential candidate and former mayor of New York, born on this day in 1942, shares his thoughts on taxes